TOKYO: Japan’s biggest bank, Mitsubishi UFJ Financial Group (MUFG), wants to buy more U.S. commercial lenders and asset management firms, a top official said, citing the two segments as areas where the Tokyo-based bank still lacks scale.
“In the United States, our commercial bank is ranked around 13th. We need inorganic growth there,” said Nobuyuki Hirano, president of Japan’s largest lender by assets, referring to acquisition opportunities in a recent interview in Tokyo. MUFG is positioning asset management business as a core profit driver, along with its commercial banking, Hirano added.
“Asset management business does not require a whole lot of assets. We definitely lack scale in overseas asset management and institutional investor services businesses,” he said. “For instance, we need to expand in the United States.”
Like its domestic banking peers, MUFG had less exposure than overseas rivals to global financial markets at the time of the 2008 crisis, and emerged relatively unscathed. Japanese lenders have accelerated overseas expansion since then, while many European and U.S. peers have scaled back global operations.
Since 2007, MUFG has spent $41.3 billion in acquisitions, according to Thomson Reuters data. These include California’s UnionBanCal Corp and a 20 percent stake in Morgan Stanley in 2008, and a majority stake in Thailand’s Bank of Ayudhya Pcl in 2013.
But Hirano said the bank is unlikely to add assets at the same pace in future. He said regulatory changes make it more costly for banks to own large assets, and his bank will expand into more fee-oriented businesses. MUFG, itself created by a merger of two Japanese banking groups in 2005, raised total assets by 50 percent in 10 years to 290 trillion yen ($2.4 trillion).
Hirano said the lender is also keen to expand in Asia. Thailand’s Ayudhya will be the key plank for MUFG’s core commercial banking operations in greater Mekong region, including Cambodia and Vietnam, he said. MUFG is among bidders interested in buying Philippine’s United Coconut Planters Bank, Reuters reported in July.
